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					AMG Financial Services


  Life Settlements
Life Settlements
 Our Product is Simple.

We provide a solid financial tool to people who
want a safe, stable, easy to understand financial
tool that is not subject to stock market volatility
or interest rates and provides them above
average returns.
Life Settlements have existed for more than 100 years,
but until recently were often arranged privately
between friends and family members.

Life Settlement Companies were founded to meet the
needs of individuals who have life insurance they no
longer want or need, that can legally be sold to a new
owner who will collect the benefit when the insured
passes away.
What is a Life Settlement?
A Life Settlement is the purchase of the Financial
Benefits of an individual’s life insurance policy.

Simply put, the insured are individuals who have
determined they have excess life insurance, who
will receive more than the Cash Surrender Value by
selling their personal property, (a life insurance
policy) on the open market.

Each insured has a Medically Determinable Life
How Can I Own Someone Else’s
Life Insurance?
Life Insurance is Personal Property. Just like you sell your used
property, anyone can sell their life insurance policy.

As the new owner you now have the full right to name someone as
the new beneficiary. It’s just like owning life insurance on yourself
except here the insured is someone other than you.

When that person passes away your named beneficiary will receive
the death benefit.
Why Do People Sell Their Policies?
Financial Planners, Estate Attorneys, Tax Attorneys, CPA’s, or
Insurance Agents council their clients to take advantage of
selling their excess life insurance.
           They have become wealthy enough to “self-insure”

           Change in Tax or Estate status

           Change in business ownership,

           Key Man Insurance policy not needed

           Death of the policy’s beneficiary

           Change in family status: Children get married, move out

           Desire to donate to a favorite charity

           Insured may realize profit by selling vs. cash-surrender value

           Illness forces sale for financial/employment reasons
Finding The Right Policy
AMG Financial Services finds you a policy that meets your
financial needs. All policies sold to clients exist as a policy that
has been sold as a Life Settlement.

Each policy will have a Life Expectancy Certificate that provides
you a medically qualified opinion of the insured’s prognosis of life

Each policy is written by an “A” rated or better USA Life
Insurance Company who contracts to pay the Death Benefit to the
current owner’s beneficiary.

You, along with a Third Party Administrator, will review all
documentation regarding the policy to your satisfaction.
Ownership Purchase Agreements
The supplier of Life Settlements to AMG Financial Services has
developed proprietary purchase contracts designed to identify a
specific owner of a specific policy for purchase to avoid
substitution of policies.

These contracts detail how the funds are escrowed and disbursed.

Premium notices are sent to the owner of the policy for payment.
Insurance Policy Contract
Each policy’s terms are reviewed to identify any potential
problems and ensure transfer of ownership. Some terms can
be exclusions regarding transferring of policies, policy
lapses, exceptions, etc.

Some of the policies are owed by trust and not individuals.
Also reviewed is the Irrevocable Life Insurance Trust
Agreement to make sure the policy can be transferred.
Beneficiary Release Contracts
Proprietary contracts will be drafted specifically for you and
serve as legal contracts designed to identify the beneficiary
who would expect to benefit from the death of the insured.

Our staff will obtain the appropriate Power of Attorney from
all parties to allow the insurance representative of AMG
Financial Services to act on behalf of the parties in the
transaction to effect the purchase of a life insurance policy.

The insurance company will confirm policy details in writing
with copies of the necessary forms for policy owner and
beneficiary changes.
How Medical Underwriting
is Performed
Life Expectancy is the average number of years remaining in a
person’s life at a particular age, based on a scientific review of
their past medical history and their current medical status, as
determined by Board Certified Medical Professionals and
Actuarial Life Tables.
Actuarial Life Tables
Actuarial Life Tables have been established by the
Life Insurance Industry actuaries. They collect
and analyze life expectancies for the US
population, based on a 100+ year history of deaths
occurring on an annual basis. These tables have a
deviation error of less than .005%
Medical Release Form
All individuals insured by the policy of interest must agree to
sign all necessary medical release forms for all medical records
and information pertaining to their recent health status and past
physical condition.

This release shall remain valid for the life time of the insured
and further, that the insured agrees to periodic reviews of their
current health status by the policy owner or their agent.
Who Performs the
Life Expectancy
Life Expectancies are performed by certified medical
laboratories or by board certified physicians who are
independent contractors that are industry recognized specialists.

They utilize medical science and known industry actuarial
methods in their evaluation models.
Sample Life
Life Expectancy Factors
 • Age                      •   Smoking
 • Sex                      •   Education
 • Race
                            •   Geography
 • Past medical history
                            •   Occupation
 • Family medical history
 • Alcohol                  •   Marital status
 • Weight                   •Physical   activity
Actual Life Settlements Clients
Have Purchased
    Purchase Price                                           Policy Face Values

      $40,000                                                     $100,000

     $125,000                                                     $300,000

     $250,000                                                     $500,000

     $350,000                                                    $1,000,000

      $1,700,000                                                 $3,400,000
     •Premiums must be paid to continue the Policy in force. Typical premiums are
     estimated at 4% annually of the Policy Face. All projected returns are based
     on the Insured’s Life Expectancy.
Nationwide Network
The insurance partner of AMG Financial Services has
developed a national relationship with policy brokers who
can provide a range of $20,0000,000 to $40,000,000+ a
month in face value of policies.

They developed proprietary financial software to evaluate

Due to our strict purchasing requirements, not all policies
are accepted. Typically we find one out of 10 that meet all
our requirements for purchasing.
Projected Returns on Life
What amount of return do you expect to receive in
today’s market?

       5%, 8%, 10%, 15%, 20% or more?

A Life Settlement’s Contracted Return is typically 22% to
 40% annualized return.

Dependant upon the specific policy you choose, your return
 may be more or less.
An Actual Policy Scenario
Insured:                 An 85 Year Old Female
Certified Life Expectancy:             3 Years
Premiums Paid Up For:                  4 Years
Face Value of Policy:                $ 500,000
Purchase Price:                      $ 250,000
Annualized Simple Interest Return:      33.3%
An Actual Policy Scenario
Insured:                 An 74 Year Old Male
Certified Life Expectancy:             4 Years
Premiums Paid Up For:           No Premiums
Face Value of Policy:              $ 1,000,000
Purchase Price:                    $ 380,000
Annualized Simple Interest Return:      40.0%
The Policy You Purchase
   You become the owner
   You name the beneficiary(s)
   You hold the actual policy
   You can change the beneficiary as often as desired
   The policy is Non-Contestable with the suicide clause
   The policy issued by a US insurance company rated “A” or
    better by A. M. Best.
Our Responsibility
   Verification of coverage/fraud prevention.

   Medical evaluations from Certified Medical
    Laboratories or Board Certified Physicians.

   Administrate all policy changes to make you the owner
    and irrevocable beneficiary.

   Provide all closing documents to you including the
    documents necessary to transfer the life insurance policy
    into your name.

   Take possession of Life Settlement Policy.
Life Settlements as a Financial
The flexibility of Life Settlements as a financial tool is
limited only by your imagination
   •   Purchase real property     • Insurance for
   •   Collateral on loans          uninsurable people
                                  • Increase church
   •   College fund
                                    building funds
   •   Estate planning            • Incentives for key people
   •   Charitable giving          • Fund employee benefits
   •   Settle claims              • Reduce tax liability
                                  • Reinsurance
   •   Build net worth
   •   Guarantee investor funds
  Estate Planning
 “Reducing Obstacles to Building Wealth”
                                                       July/August 2001 Offshore Finance USA

 The three main impediments to building wealth
       1 poor investment performance
       2 inflation
       3 taxes

     Tax-free death benefits: generally, there are no income or
     capital gain taxes on a death benefit paid to a named
     beneficiary. Estate taxes may apply, depending on the
     ownership of the policy.
                                         Robert Burkarth, vice president
                                         Prudential Securities, Inc
                                         New York, NY
•Always seek tax advice from your personal advisors, each persons circumstance may vary.
•Not a paid advertisement, or inducement to evade taxes.
Real Estate Purchase Example
         Problem                  Solution

  •   Land cost too high    •   Life Settlement
  •   Appraised below       •   Life Settlement
      owner’s price point
  •   Need for expansion    •   Life Settlement
      of current capital
  •   Need to expand        •   Life Settlement
      number of potential
Life Settlement Solution
Financial Model                                              Cash Needed                     Collateral

 Office Plaza                                               $ 1,104,000     $ 1,425,000
 DuPont Airport Pub                                           1,100,000        2,000,000
 Trinity Road Restaurant                                      2,350,000        3,000,000
 Opening/Conversion Expense                                     500,000            -
 Purchase LifePolicy($10mm@14%)                               1,400,000     $10,000,000
                    Office Plaza
 LS Premium Reserve @ 4% (2 yrs)                                800,000          800,000
 Bond Wrap @ 6% of Face LS                                      600,000            -
 Prismm Acquisition ( 5 restaurants)                          2,000,000
 Working Capital                                                146,000      __________
    Totals                                                  $10,000,000      $17,225,000
                                                                     LTV = 58%
Loan Secured by Collateral, Life Settlement Insurance Policy and Bond Wrap that will guarantee payment
of loan before term. EBITDA on 7 restaurants will fund loan payments until paid in full at a ratio of 2:1.
At present, AMG Financial Services does not secure for clients the financing through banks but we
will collaborate with your bank to collateralize loans using life settlements.
Retention of Key Personnel
 •   Life Settlements offers a   •   $100,000 in a Bonus Pool
     unique opportunity to           can be expanded to over
     provide current capital         $250,000 along with
     expansion in order to           favorable tax benefits.
     retain Key Personnel.

 •   Payment of bonuses,         •   Deferring of current
     incentive payments, or          bonuses to future
     performance rewards is          payments allows the
     limited only by one’s           recipient to enjoy
     imagination.                    flexibility in tax planning
Investment Portfolio
The rule of large numbers reflects how we can benefit from
owning several policies in the form of a “Portfolio”.

When we own more than one policy the likelihood of a policy
maturing increases. Therefore the more policies we own the
more likely the event of a policy maturing.

We now have enhanced the probability of the maturity of our
total portfolio.
    Land Purchase
   1,000 Acres                              Loan Proceeds - $750,000
   Land Cost - $450,000                     - 450,000 Land
                                             - 200,000 Purchase Life
   Bank Loan -$750,000                       Settlements
   Term 6 Years                             - 100,000 Premium Escrow &
   Interest rate prime +                     Surety Bond

   Collateral = Land + Life

The Life Settlements and the Surety Bond will pay off the loan. You borrow
enough cash to buy the land, buy the Life Settlements with the covering bond,
and cover the premium payments on the Life Settlement. Loan is paid off on/or
before the term. At present, AMG Financial Services, does not securitize life
settlements but we are able to arrange buyback guarantees.
In The News
   Senior Market          A D V I S O R

   SMA March, 2002
   “Reining in the Viatical Rep”
    By Mary Hillebrand

   If life settlements are good enough for Warren Buffett, shouldn't they be good enough for
   everyone else? Last October, Gen Re, the global reinsurance and risk management arm of
   Buffett's Berkshire Hathaway Inc., arranged a financing facility upwards of $400 million for
    Living Benefits Financial Services LLC, a life settlements funder in Minnetonka, Minn.
   Similarly, sources close to Life Equity LLC, of Hudson, Ohio, say that company has also
   secured a comparable amount from Buffett's group.

   A new way of doing business
   2002 is starting off on a better foot, some of the bigger life settlement companies say,
   thanks to new funding arrangements with Gen Re. The reinsurer has brought consistent
   financial backing and a name that will inspire more confidence in the life settlement
   business, argues Steve Ballard, CEO of the Norseman Group, a marketing and brokerage
   company based in Minneapolis. "Berkshire Hathaway/Gen Re adds huge prominence and
   credibility to this business. It has generated a ton of business and has opened doors that
   previously weren't open to us."
Purchasing Flow Chart
                                              AMG Financial

               Facilitates Sale
               Life Settlement                   Purchaser
                                               Contracts to
                                                                        Purchase Review Policy and
                                                                              LE Provided By AMG
                                              Life Settlement                Fin. Svcs. – Okays and
                                                                            Delivers Policy to Escrow
                Escrow Agent
          Verifies the Policy, the Premium,   Purchase           Signed
                the Medical Certificate and
                                                Funds           Contracts
                Disperses Funds to Seller,
                AMG Fin. Svcs. and sends
                  advice of Transfer to the
                   Purchaser as Proof of
                transfer to the New Owner
                                               Escrow Agent

Your money is retained in a third-party escrow account under your control until every aspect of
the purchase is satisfied to your full extend of acceptance.
•   Life Settlements avoid the risks of the volatile Stock and
    Bond Markets.

•   To our knowledge, no other product gives you the
    flexibility of Life Settlements.

•   Nor does any product in the market place today offer the
    potential returns that a Life Settlement provides.
Contact Us
Start backing your company revenue, pension plan investments,
project funding, real estate development and other monetary
concerns with Life Settlements.
                       Contact us today:

                    Cindy Castano Swannack, President
                         AMG Financial Services

                           3195 Selhurst Court
                          Fayetteville, NC 28306

                        Call Toll Free 866 547 7009


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